# REPLIGEN CORP (RGEN) FY 2025 MD&A

Verbatim Item 7 Management's Discussion and Analysis from REPLIGEN CORP's 10-K for fiscal year 2025.

SEC filing source: https://www.sec.gov/Archives/edgar/data/730272/000119312526076528/rgen-20251231.htm
Accession: 0001193125-26-076528
Filing date: 2026-02-26
Report date: 2025-12-31
Extracted from a substantive MD&A body after the formal Item 7 span was a TOC or reference stub.
Confidence: high

Company profile: /company/RGEN/
All MD&A years: /company/RGEN/mda/
Previous year: /company/RGEN/mda/fy2024/ (FY 2024)

Results of Operations

The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and the related footnotes, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K. All dollar and percentage changes made herein refer to the year ended December 31, 2025, compared with the year ended December 31, 2024, unless otherwise noted.

Revenues

Total revenues were comprised of the following:

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[[/GREPCENT_TABLE]]

Product revenue

We are continuously focused on selling our products directly to customers in the life sciences and pharmaceutical industries, including CDMOs. These direct sales have represented 90.8% of our total product revenue during 2025 compared to 89.7% of our total product revenue in 2024. Sales of our bioprocessing products can be impacted by the timing of large-scale production orders which may result in significant quarterly fluctuations.

Product revenues were comprised of the following:

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","","2025","","","2024"],["","","(Amounts in thousands)"],["Filtration products","","$","402,792","","","$","372,963"],["Chromatography products","","","153,176","","","","122,810"],["Process analytics products","","","81,237","","","","59,301"],["Proteins products","","","97,435","","","","74,425"],["Other","","","3,320","","","","4,679"],["Total product revenue","","$","737,960","","","$","634,178"]]
[[/GREPCENT_TABLE]]

Revenue from the sale of our products which make up our filtration, chromatography, process analytics and proteins franchises comes from the sale of a number of products as described in Part I, Item 1. “Business - Our Products” of this report.

In 2025, product revenue increased by $103.8 million, or 16.4% , compared to 2024. This growth is widespread across our portfolio of products and includes significant contributions from all our franchises. Geographically, product revenue increased 15.7% in North America, 16.0% in Europe and 19.3% in Asia Pacific and the rest of the world. Related to our acquisitions, products acquired from

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908 Devices contributed $9.3 million in revenue during the year ended December 31, 2025. In addition, the year ended December 31, 2024 included $11.5 million of COVID-19 related sales.

Royalty and other revenue

Royalty and other revenue for all periods presented relate to royalties received from a third-party systems manufacturer associated with our OPUS® chromatography columns. Royalty revenues are variable and are dependent on sales generated by our partners.

Costs and operating expenses

Total costs and operating expenses for the years ended December 31, 2025 and 2024 were comprised of the following:

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[[/GREPCENT_TABLE]]

Cost of goods sold

In 2025, cost of goods sold decreased $7.8 million, or 2.2%, compared to 2024. The decrease in cost of goods sold is primarily due to lower costs related to scrap, excess and obsolete inventory and restructuring activities in 2025, compared to those incurred in 2024. Restructuring relates to activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations. These decreases were partially offset by higher export duties, direct material and labor costs.

In 2025, gross margin was 52.3%, compared to 43.3% in 2024. The increase in gross margin resulted from the decrease in cost of goods sold as described above.

See Note 5, “Restructuring Activities and Other Inventory-Related Charges” in the notes to the consolidated financial statements, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K, for more detail.

Research and development expenses

Research and development expenses (“R&D”) expenses are related to the development of products supporting bioprocessing operations, which include personnel compensation, supplies and other research expenses. Due to the fact that these various programs share personnel and fixed costs, we have not provided historical costs incurred by project.

In 2025, R&D expenses increased $11.0 million, or 25.4%, compared to 2024. The increase in R&D costs is primarily driven by the 908 Devices PAT Portfolio and Tantti acquisitions, which have been included in our consolidated results of operations since the acquisition dates of March 2025 and December 2024, respectively.

Selling, general and administrative expenses

Selling, general and administrative (“SG&A”) expenses include the costs associated with selling our commercial products and costs required to support our marketing efforts. It also includes legal, accounting, patent, shareholder services, amortization of intangible assets and other administrative functions.

In 2025, SG&A costs increased $27.1 million, or 10.3%, compared to 2024. The increase in SG&A is primarily driven by an investment in personnel costs to support growth, increased headcount, and incremental professional services, primarily driven by our acquisition and integration activities. These increases were partially offset by the incremental stock-based compensation expense incurred during 2024 associated with the modification of our former Chief Executive Officer’s (“CEO”) unvested equity awards in connection with their transition from CEO to Executive Chair of our Board of Directors. See Note 11, “Stockholders' Equity” included within Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K for more information.

Contingent consideration

Change in fair value of contingent consideration represents the change in fair value of the obligation included in current and noncurrent contingent consideration on the consolidated balance sheets as of the end of each period. Remeasurement of the contingent consideration obligation is done each quarter and the carrying value of the obligation is adjusted to the current fair value through our condensed consolidated statements of comprehensive income. The changes during 2025 compared to 2024 were related to revisions to the amount and expected timing of future revenues underlying certain contingent payments and a change in market inputs used to calculate the discount rate.

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Other income, net

The table below provides detail regarding our other income, net:

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[[/GREPCENT_TABLE]]

Investment income

Investment income includes income earned on cash, cash equivalents and marketable securities. Our investment income decreased $8.3 million in 2025, compared to 2024 due to a reduction in interest rates and varying average cash and marketable securities balances during the period. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates.

Interest expense

Interest expense increased $0.8 million in 2025, compared to the same period of 2024. Interest expense includes contractual coupon interest on our outstanding convertible notes and the associated accretion of the discount. The discount is being accreted into interest expense using the effective interest method over the term of the 2023 Notes, as defined below. See Note 13, “Convertible Senior Notes” in the notes to the consolidated financial statements, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K for more detail.

Amortization of debt issuance costs

Transaction costs related to the issuance of the 2019 Notes and the 2023 Notes, as defined below, are amortized and recorded within amortization of debt issuance costs on the consolidated statements of comprehensive income.

Other income (expense), net

Other income (expense), net increased $8.0 million in 2025, compared to the same period in 2024. Other income (expense), net primarily includes the changes in foreign currency transaction gains and losses, revaluation impact of intercompany loans with subsidiaries and unrealized and realized impacts of foreign exchange forward contracts.

Income tax provision (benefit)

Income tax provision (benefit) was as follows:

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[[/GREPCENT_TABLE]]

For year ended December 31, 2025, we recorded an income tax provision of $13.5 million. The effective tax rate was 21.6% for 2025 and is based upon the income for the year ended December 31, 2025 and the composition of income in different jurisdictions.

The difference in effective tax rates between the periods was primarily due to the increase in income before income taxes, nontaxable contingent consideration, lower nondeductible stock-based compensation and an increase in valuation allowance offset by stock windfall tax benefits. Our effective tax rate for the year ended December 31, 2025 was more than the U.S. statutory rate of 21% primarily due to an increase in valuation allowance offset by nontaxable contingent consideration and stock windfall tax benefits.

On July 4, 2025, the United States enacted into law new tax legislation, the One Big Beautiful Bill Act (“OBBBA”), which contains several provisions modifying the corporate income tax code such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, updates to the international tax framework and the reinstatement of certain business-related provisions. The legislation has multiple effective dates, with provisions taking effect from 2025 through 2027. The changes effective in 2025 are included in our provision for income taxes for the year ended December 31, 2025 and were not material. We do not expect the OBBBA to have a material impact on our consolidated financial statements or results of operations in future periods.

See Note 10, “Income Taxes” in the notes to the consolidated financial statements, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K for more detail.

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Liquidity and Capital Resources

We have financed our operations primarily through revenues derived from product sales, and the issuance of notes and public offerings. Our revenue for the foreseeable future will primarily be limited to our bioprocessing product revenue.

At December 31, 2025, we had cash, cash equivalents and marketable securities of $767.6 million compared to cash and cash equivalents of $757.4 million at December 31, 2024.

On December 14, 2023, the Company issued $600.0 million aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “2023 Notes”) in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of the 0.375% Convertible Notes due 2024 (the “2019 Notes”) and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). Pursuant to the Exchange and Subscription Agreements, the Company exchanged $217.7 million of its 2019 Notes for $309.9 million aggregate principal amount of the 2023 Notes (the “Exchange Transaction”) and issued $290.1 million aggregate principal amount of the 2023 Notes (the “Subscription Transactions”) for $290.1 million in cash. Proceeds from the Subscription Transactions amounted to $276.1 million after debt issuance costs of $13.9 million.

The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of 1.00% per year and have an effective interest rate of 4.39%. Interest is payable semi-annually in arrears on each of June 15 and December 15, which commenced on June 15, 2024. The 2023 Notes will mature on December 15, 2028, unless earlier redeemed, repurchased or converted. During the fourth quarter of 2025, the closing price of the Company’s common stock did not exceed 130% of the conversion price of the 2023 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the 2023 Notes are not convertible at the option of the holders of the 2023 Notes during the first quarter of 2026, the quarter immediately following the quarter when the conditions are met, as stated in the indenture governing the 2023 Notes.

Cash flows

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[[/GREPCENT_TABLE]]

Operating activities

For 2025, our operating activities provided cash of $117.4 million reflecting net income of $48.9 million and non-cash charges totaling $119.4 million primarily related to depreciation and amortization, stock-based compensation, right of use asset amortization, amortization of debt discount and issuance costs, contingent consideration fair value adjustments, net unrealized foreign exchange gains and deferred income taxes. The non-cash charges were partially offset by unfavorable changes in working capital of $50.9 million. Contributing to this was increases in accounts receivable of $17.2 million, due to timing of sales and collections from customers, increases in inventory of $14.9 million, to support revenue growth and future orders, increases in prepaid expenses and other assets of $9.3 million and decreases in operating lease liabilities of $15.5 million, due to normal course rent payments. These unfavorable changes in working capital were partially offset by increases in accounts payable and other accrued liabilities of $6.0 million, due to timing in payments to vendors.

For 2024, our operating activities provided cash of $175.4 million reflecting net loss of $25.5 million and non-cash charges totaling $140.0 million primarily related to depreciation and amortization, amortization of debt discount and issuance costs, contingent consideration fair value adjustments, deferred income taxes, stock-based compensation charges, loss on disposal of fixed assets, and right of use asset amortization. A decrease in inventory contributed $56.9 million to the positive change in working capital, of which $36.1 million was related to our previous restructuring activities and other inventory-related charges. Accounts payable and accrued expenses provided $19.0 million due to the timing of payments to vendors. Partially offsetting these favorable changes, accounts receivable increased $14.0 million due to timing of sales and receipts from customers.

Investing activities

Our investing activities consumed $298.5 million of cash in 2025, primarily due to $200.3 million in cash used for the purchase of marketable securities and $70.3 million, net of cash acquired, primarily used for the acquisition of the 908 Devices PAT Portfolio. Capital expenditures during 2025 consumed $25.7 million, inclusive of $2.2 million of capitalized costs related to our internal-use software.

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Our investing activities consumed $86.4 million of cash in 2024, primarily due to $54.8 million in cash, net of cash acquired, used for the 2024 acquisition of Tantti Laboratory Inc. Capital expenditures consumed $29.9 million in 2024, including $4.2 million of capitalized costs related to our internal-use software for 2024. In addition, in November 2024, the Company amended the License Agreement (the “Daylight Agreement”) with DRS Daylight Solutions, Inc. (“Daylight”) to extend the License Agreement one additional year for a one-time payment of $3.0 million.

Financing activities

Our financing activities consumed $15.2 million of cash in 2025, which was driven by $8.8 million of cash disbursed related to the tax withholding obligation on vesting of restricted stock units and $9.5 million to settle the cash portions of the contingent consideration earnout obligations related to acquisitions from previous years. These cash outflows are partially offset by proceeds received from stock option exercises of $3.2 million.

In 2024, cash consumed by financing activities was $82.9 million, driven primarily by the repayment of the 2019 Notes of $69.9 million, $9.9 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units, and $7.3 million paid to settle the cash portion of the contingent earnout obligation related to our acquisition of Avitide in September 2021. These payments were partially offset by proceeds received from stock option exercises during the period.

We do not have any special purpose entities or off-balance sheet financing arrangements.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2025:

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[[/GREPCENT_TABLE]]

(1) Represents future interest and principal payments on the 2023 Notes. For further detail on the 2023 Notes, see Note 13, “Convertible Senior Notes“, in the notes to the consolidated financial statements, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K.

(2) In connection with the acquisition of Tantti, we have an obligation to pay a maximum of $54.5 million (undiscounted) in contingent consideration earnout payments in cash over a three-year earnout period beginning January 1, 2025 and ending December 31, 2027. Amounts above represent the expected fair value we expect to pay for the obligation as of December 31, 2025. See Note 3, “Fair Value Measurements” and Note 4, “Acquisitions,” for additional information

(3) Represents future minimum lease payments under non-cancellable leases. For more information on our lease obligations, see Note 6, “Leases”, in the notes to the consolidated financial statements, included within Part IV, Item 15, “Exhibits and Financial Statement Schedules”, in this Annual Report on Form 10-K.

(4) Represents future payments for legally binding software and raw material purchase commitments.

Capital Requirements

Our future capital requirements will depend on many factors, including the following:

•
the expansion of our bioprocessing business;

•
the ability to sustain sales and profits of our bioprocessing products and successfully integrate them into our business;

•
our ability to acquire additional bioprocessing products;

•
the scope of and progress made in our R&D activities;

•
the scope of investment in our intellectual property portfolio;

•
contingent consideration earnout payments resulting from our acquisitions;

•
the extent of any share repurchase activity;

•
the success of any proposed financing efforts;

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•
general economic and capital markets;

•
change in accounting standards;

•
the impact of inflation on our operations, including our expenditures on raw material and freight charges;

•
fluctuations in foreign currency exchange rates; and

•
costs associated with our ability to comply with emerging environmental, social and governance standards.

Absent acquisitions of additional products, product candidates or intellectual property, we believe our current cash balances and future cash flow from operations are adequate to meet our cash needs for at least the next 24 months. We expect operating expenses in 2026 to increase as we continue to expand our bioprocessing business. We expect to incur continued spending related to the development and expansion of our bioprocessing product lines and expansion of our commercial capabilities for the foreseeable future. Our future capital requirements may include, but are not limited to, purchases of property, plant and equipment, the acquisition of additional bioprocessing products and technologies to complement our existing manufacturing capabilities, and continued investment in our intellectual property portfolio.

We plan to continue to invest in our bioprocessing business and in key R&D activities associated with the development of new bioprocessing products. We actively evaluate various strategic transactions on an ongoing basis, including licensing or acquiring complementary products, technologies or businesses that would complement our existing portfolio. We continue to seek to acquire such potential assets that may offer us the best opportunity to create value for our shareholders. In order to acquire such assets, we may need to seek additional financing to fund these investments. If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, for example, due to acquisition-related financing needs or lower demand for our products, among potential other events, we may seek to sell common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding, or seek other debt funding. The sale of equity and convertible debt securities may result in dilution to our shareholders, and those securities may have rights senior to those of our common shares. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict our operations. Any other third-party funding arrangement could require us to relinquish valuable rights. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, if at all.

Net Operating Loss Carryforwards

At December 31, 2025, we had federal net operating loss carryforwards of $7.5 million, state net operating loss carryforwards of $15 million, and foreign net operating loss carryforwards of $27.4 million. The federal net operating loss carryforwards have unlimited carryforward periods and do not expire. The state net operating loss carryforwards will expire at various dates through 2045. Approximately $5.7 million of the foreign net operating loss carryforwards have unlimited carryforward periods and do not expire, while $21.7 million of the foreign net operating loss carryforwards will expire at various dates through 2034. We had federal and state business tax credit carryforwards of $7.1 million available to reduce future federal and state income taxes. The business tax credit carryforwards will expire at various dates through 2045. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service, state and foreign jurisdictions and may be limited in the event of certain changes in the ownership interest of significant stockholders.

Foreign Earnings

As of December 31, 2025, we have accumulated undistributed earnings generated by our foreign subsidiaries. We have not provided for taxes on outside basis differences of our foreign subsidiaries as it is not practicable and we have the ability and intent to indefinitely reinvest the undistributed earnings of our foreign subsidiaries, and there are no needs for such earnings in the United States that would contradict our plan to indefinitely reinvest.

Effects of Inflation

Our assets are primarily monetary, consisting of cash and cash equivalents and marketable securities. Because of their liquidity, these assets are not directly affected by inflation. Since we intend to retain and continue to use our equipment, furniture, fixtures and office equipment, computer hardware and software and leasehold improvements, we believe that the incremental inflation related to replacement costs of such items will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources.

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